Succession Planning – Know your family
13/07/2016 by Chris HarrisStrengths & Weaknesses
While family in businesses can work extremely well, just because you are related to someone doesn't mean that a productive business partnership can be forged overnight. It is important to carefully evaluate what skills each family member brings to the business. In some cases, the next generation may actually be able to bring new perspectives and insight into the business which can help it grow; take for example, a family member who has studied livestock genetics and can bring that knowledge back to the business to improve the herd or one who has studied business and may be able to competently take over the back office side of the business.
However, it is also important to identify areas where individual potential business partners may need to grow. For example, just because a family member is amazing at managing livestock on the property, it doesn't mean that he or she will automatically be great at keeping the books up to date or other jobs that the first generation may currently be responsible for. Skills may need to be shared and it is important to know going in what up-skilling may be required to get particularly people involved in particular roles within the business as this may affect timeframes around handover.
While family in businesses can work extremely well, just because you are related to someone doesn't mean that a productive business partnership can be forged overnight. It is important to carefully evaluate what skills each family member brings to the business. In some cases, the next generation may actually be able to bring new perspectives and insight into the business which can help it grow; take for example, a family member who has studied livestock genetics and can bring that knowledge back to the business to improve the herd or one who has studied business and may be able to competently take over the back office side of the business.
However, it is also important to identify areas where individual potential business partners may need to grow. For example, just because a family member is amazing at managing livestock on the property, it doesn't mean that he or she will automatically be great at keeping the books up to date or other jobs that the first generation may currently be responsible for. Skills may need to be shared and it is important to know going in what up-skilling may be required to get particularly people involved in particular roles within the business as this may affect timeframes around handover.
Know your family's dynamics
While in some families, succession is relatively straight forwards (i.e., one business, one child to inherit it), in many, it is more complex. While in an ideal world, many parents want to bring all of their children into the business or divide it into equal shares, reality may not make this possible. First, not all children may be interested in being involved in the family business or may not be able to given their geographic location. Also, being related does not automatically make siblings into good business partners; they may have very different ways of managing money, work ethics, and visions for the future of the business. While family members may bring different useful skills into the business, will these be compatible within the organisation? How might decision making occur or be shared within the business? Who might be able and willing to take on day-to-day roles?
While in some families, succession is relatively straight forwards (i.e., one business, one child to inherit it), in many, it is more complex. While in an ideal world, many parents want to bring all of their children into the business or divide it into equal shares, reality may not make this possible. First, not all children may be interested in being involved in the family business or may not be able to given their geographic location. Also, being related does not automatically make siblings into good business partners; they may have very different ways of managing money, work ethics, and visions for the future of the business. While family members may bring different useful skills into the business, will these be compatible within the organisation? How might decision making occur or be shared within the business? Who might be able and willing to take on day-to-day roles?
So that a succession plan has the best chance of success it is important that all of these aspects are reviewed and discussed.
